Owners keep up on loan payments

Foreclosures decrease as economy brightens

Trend is expected to hold

4.23% of Md. homeowners fell behind on payments

December 12, 2004|By Kathleen Cullinan | Kathleen Cullinan,SUN STAFF

Fewer Maryland homeowners fell behind in their mortgage payments or lost their homes to foreclosure between July and September compared with the previous quarter as the economy showed signs of improvement, according to a survey released Thursday.

The number of home-loan payments that were at least 30 days past due in Maryland fell to 4.23 percent during the third quarter, down from 4.24 percent between April and June, a study by the Mortgage Bankers Association found. The third-quarter figure for 2004 also is lower than it was between July and September of last year, when 5.23 percent of payments were late.

Nationally, 4.41 percent of homeowners fell behind during the three-month period ending in September based on seasonally adjusted figures, the survey showed. That was down from 4.43 percent in the previous quarter.

Douglas Duncan, the association's chief economist and senior vice president, said the trend is generally expected to hold as the economy improves. But he said an unusually cold winter could strain homeowners who have to pay higher heating bills and delinquency rates could spike as a result.

But with housing prices continuing to grow and wages still struggling to keep pace, a relatively small dip in the number of late payments obscures how much some homeowners struggle to make ends meet, said Becky Sherblom, executive director for the Maryland Center of Community Development.

"Housing costs are just shooting through the roof," Sherblom said, adding that since the survey results were not broken down by income level it was impossible to know whether the rates were uniform for all homeowners. "I would still expect to see these rates grow."

Though a smaller number of people fell behind on their mortgage payments in Maryland last quarter, it was still higher than the six-year low reached during the first three months of the year, when 3.89 percent were delinquent.

The study analyzed 959,729 loans in Maryland and slightly more than 38 million nationally. The study also found a sharp drop in the number of homes that fell into foreclosure between July and September. Maryland had 0.87 percent of its home loans in foreclosure, down from 0.96 percent in the second quarter and 1.13 percent in the first quarter.

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